The European Union’s Exit from the Energy Charter Treaty: A Rift in International Energy Co-operation

On 28 June 2025, the European Union (EU) and Euratom officially withdrew from the Energy Charter Treaty (ECT). The withdrawal represents the culmination of a long and complex process The ECT, concluded in 1994 after the dissolution of the Soviet bloc, was originally strongly supported by the European Community (EC), which was interested in promoting EC energy investments in Eastern European fossil fuel markets. However, over the years, this Treaty has raised several issues of legal compatibility with EU law of substantial and procedural nature. Therefore, the EU promoted reform of the ECT through the so-called “modernisation process.” Following the limited outcomes of this process, the EU decided to withdraw from the Treaty, while allowing Member States to remain Contracting Parties. The article wants to examine the two main reasons for which the original text of the ECT posed issues of legal compatibility and political opportunism for the EU and its Members. In this context, it specifically analyses the impact of the Treaty’s provisions on the environmental and climate protection goals undertaking by the EU and its Member States as well as the relationship between the Court of Justice of the EU (CJEU) and investment arbitral tribunals. Therefore, the article briefly examines the legal regime established by the Agreement. Then, the possible impact of this Treaty on environmental protection and climate change, as well as the relation between investment arbitration and the EU judicial system are taken into consideration, since these two aspects mainly prompted the EU to request reform of the Treaty. Subsequently, the article focuses on the modernisation process, its main results and limits. Finally, the path leading to the Union’s withdrawal from the Treaty is analysed, evaluating possible legal and political consequences of the exit. The author concludes that, despite the poor outcomes of the modernisation process, due to geopolitical and legal grounds, it would have been preferable if the EU had not withdrawn from the ECT or, at least, if the Union had withdrawn from this Treaty only after approving its modernised version.